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2016 (10) TMI 713 - AT - Income TaxEligibility of deduction u/s.80P(2)(a)(i) - object of society - idle money placed in bank with interst earned thereon - Held that:- There is no dispute that one of the main object of assessee society was providing credit facility to its members. AO himself has mentioned that this was the primary object for which assessee was incorporated. No doubt, out of substantial sum received as deposits from the members, only small portion were given by assessee as loans to its members. Major part of the funds were parked in FDs. However, it is an admitted position that assessee was bound to give interest to its members on the deposits received by it from them. Therefore, when there were no takers for the money, which assessee as a part of its objects wanted to lend, the only available choice for assessee, in order not to keep the funds idle, was to place it in banks for earning interest. As decided in CIT v. Tumkur Merchants Souharda Credit Cooperative Ltd [2015 (2) TMI 995 - KARNATAKA HIGH COURT] the money meant for lending, remaining surplus, there being no takers, if deposited in banks for earning interest, such interest income would be attributable to the business of banking carried out by the assessee. Thus as the facts of the case here fit perfectly well with the facts in the judgment mentioned above, therefore, hold that assessee was eligible for claiming deduction u/s.80P(2)(a)(i) of the Act. - Decided in favour of assessee
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